What you're actually paying for
LMI is the price of borrowing with a smaller deposit. It protects the lender if the loan goes bad — you carry the premium so they carry the risk of lending above 80% of the property's value. That trade isn't automatically bad: paying LMI to buy years earlier has worked out well for plenty of buyers, and been a costly shortcut for others. The point of estimating it early is that the premium changes the real cost of a small-deposit purchase by enough to affect the whole strategy.
The example rate grid this estimator uses
There is no public universal LMI price list — every lender's insurer arrangement differs. What we can show honestly is a published example table, the one our estimator reads. Two patterns worth noticing: rates step up sharply at each LVR band, and bigger loans pay higher rates within the same band.
| LVR | up to $300k | $300k–$500k | $500k–$600k | $600k–$750k | $750k–$1M |
|---|---|---|---|---|---|
| 80.01–81% | 0.475% | 0.568% | 0.904% | 0.904% | 0.913% |
| 81.01–82% | 0.485% | 0.568% | 0.904% | 0.904% | 0.913% |
| 82.01–83% | 0.596% | 0.699% | 0.932% | 1.090% | 1.109% |
| 83.01–84% | 0.662% | 0.829% | 0.960% | 1.090% | 1.146% |
| 84.01–85% | 0.727% | 0.969% | 1.165% | 1.333% | 1.407% |
| 85.01–86% | 0.876% | 1.081% | 1.258% | 1.407% | 1.463% |
| 86.01–87% | 0.932% | 1.146% | 1.407% | 1.631% | 1.733% |
| 87.01–88% | 1.062% | 1.305% | 1.463% | 1.631% | 1.752% |
| 88.01–89% | 1.295% | 1.621% | 1.948% | 2.218% | 2.395% |
| 89.01–90% | 1.463% | 1.873% | 2.180% | 2.367% | 2.516% |
| 90.01–91% | 2.013% | 2.618% | 3.513% | 3.783% | 3.820% |
| 91.01–92% | 2.013% | 2.674% | 3.569% | 3.867% | 3.932% |
| 92.01–93% | 2.330% | 3.028% | 3.802% | 4.081% | 4.156% |
| 93.01–94% | 2.376% | 3.028% | 3.802% | 4.286% | 4.324% |
| 94.01–95% | 2.609% | 3.345% | 3.998% | 4.613% | 4.603% |
Rates are a percentage of the loan amount, from a published industry sample table — an example only; premiums vary between lenders and insurers, and state duty on the premium is additional.
A worked hypothetical
Round numbers, invented for illustration: buying a $900,000 property with a $90,000 deposit means borrowing $810,000 — a 90% LVR. On the example grid that's a rate of 2.516% of the loan, or roughly $20,380 in premium. Find the same deposit two LVR bands lower and the premium falls by more than half — which is why deposit strategy and LMI strategy are the same conversation.
The legitimate ways around LMI
- Stay at or under 80% LVR — the blunt one: a bigger deposit, a gift, or a cheaper property.
- Family guarantee — a relative's property secures part of the loan, bringing your effective LVR under the threshold without a bigger cash deposit. Common for first home buyers.
- Profession-based waivers — some lenders waive LMI at higher LVRs for certain professions. Lender-specific, changes over time, and exactly the kind of policy detail we track.
- Government guarantee schemes — for eligible first home buyers, a government guarantee can replace LMI entirely on a small-deposit purchase.
Which doors are open depends on your profile and the lender —ask us to check yours, or work out what the purchase looks like end-to-end with the stamp duty and borrowing power calculators.